Supreme Court: Should Homebuyers Who Secure Decree For Refund From RERA Be Treated As Financial Creditors?

The Supreme Court in the case Vishal Chelani v Debashis Nanda observed and has agreed to decide the question of law whether the homebuyers, who in the case secure the decree the Real Estate Regulatory Authority for a refund of their investment which needs to treated as financial creditors under the Insolvency and Bankruptcy Code 2016.
The bench comprising of Justice S Ravindra Bhat and Justice Prashant Kumar Mishra in the case observed wherein the appeal was filed on August 14, 2023 against the judgment delivered by the National Company Law Appellate Tribunal which had held that once a homebuyer in held to be entitled to refund, thus, he will be considered as a financial creditor and that their claim cannot be admitted as of homebuyers.
The appellant in the case contended before the Top Court that the status of him would remain the same as the homebuyer and the same would not change even if there is a decree passed in their favour by the RERA.
Further, the appellant submitted that the NCLT in various judgments had held that once the homebuyer is always the homebuyer.
Facts of the Case:
The complaint was filed by the appellant before the Uttar Pradesh Real Estate Regulatory Authority, UP RERS as stated under section 31 of the UP RERA Act, 2016 which was admitted in 2019.
Therefore, the recovery certificate was issued for refund of the amount to the appellant for the purchase of a flat.
The builder company was undergoing resolution process. Thus, the claim of the appellant is rejected by the Interim Resolution Professional as the homebuyer and asked him to resubmit his claim as a financial creditor.
The NCLAT in the case observed and has relied on the judgement of the Supreme Court in the case Kotak Mahindra Bank Limited v. A. Balakrishnan & Anr, wherein the court held that once the Recovery Certificate has been issued, the party in possession of the Recovery Certificate is to be considered as a Financial Creditor.
The Appellant aggrieved with the same approached the Supreme Court.